TaxTMI 
TaxTMI 
2015 (2) TMI 760
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....ition of Rs. 3600/- made by the Assessing Officer in view of Section 37(4) read with Section 37(5) in respect of rent paid by the assessee to P.S.I.D.C. for guest house? 2. Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the subscription paid to the employee Directors in the form of cash payment could not be treated as perquisite because the very language of Section 40(A) (5) a) (ii) refers to perquisites whether convertible into money or not? 3. Whether on the facts and in the circumstances of the case, the ITAT was right in law in upholding the orders of the CIT(A) to allow extra shift allowance on the basis of the concern as a whole working as extra shift? 4. Whether on the facts an....
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....r the assessee, however, submits that as expenditure on rent including expenditure incurred in hiring a guest house falls within Section 30 of the Act, the Income Tax Appellate Tribunal has rightly deleted this addition. Sections 30, 37(4) & (5) of the Act read as follows:- "30. In respect of rent, rates, taxes, repairs and insurance for premises, used for the purposes of the business or profession, the following deductions shall be allowed- (a) where the premises are occupied by the assessee- (i) as a tenant, the rent paid for such premises; and further if he has undertaken to bear the cost of repairs to the premises, the amount paid on account of such repairs; (ii) otherwise than as a tenant, the amount paid by him on account of curr....
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....incurred on rent, rates, taxes, repair of premises used for the purpose of business or profession. The use of the word 'profession' in Section 30 of the Act may appear to suggest that guest house expenses can be allowed as a deduction. However, a perusal of Section 37(4) of the Act, which commences with a non-obstantive clause reveals that no allowance shall be made in respect of any expenditure incurred by the assessee, after the 28th day of February, 1970, on the maintenance of any residential accommodation in the nature of a guest house. Section 37(5) of the Act further clarifies that any accommodation by whatever name maintained, hired, reserved or otherwise arranged by the assessee for the purpose of providing lodging or boardi....
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....de on behalf of an employee is not a perquisite and therefore, cannot be disallowed under Section 40-A (5) (ii) of the Act. A due consideration of the facts reveals that subscription has been made to professional institutions and clubs. The subscription, therefore, cannot be treated as a perquisite under Section 40(A) (5a) of the Act. Reliance may be placed upon a judgment of the Delhi High Court in Commissioner of Income Tax Vs. Shriram Refrigeration Industries Ltd. (supra). The second question is answered, accordingly, against the revenue. The third question is whether the Income Tax Appellate Tribunal has erred by allowing extra shift allowance on the basis of the concern as a whole working as an extra shift? Counsel for the revenue s....